Delay RRSP Home Buyers' Plan (HBP) withdrawals until after year-end

If you qualify, you and your spouse can withdraw up to $25,000 tax-free from your RRSP towards the purchase of a principal residence. The home must be purchased by October 1st of the year following the year of withdrawal. Amounts withdrawn must be repaid to RRSPs in 15 equal instalments, starting with the second taxation year following the year of withdrawal (amounts not repaid are taxed as an RRSP withdrawal).

If you're planning on using the HBP towards year-end, consider deferring your withdrawal until after December 31st. This will extend your time period for purchasing your home and repaying the amounts withdrawn by one year. You'll also want to delay your HBP withdrawal if you won't be withdrawing the full amount by January 2010. Under the HBP rules, multiple withdrawals are possible, but all withdrawals must be made in the same calendar year or in January of the following year. Consequently, if you want to withdraw funds after January 2010, you shouldn't make an HBP withdrawal in 2009.